WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as members
of the Philippine Senate and as taxpayers; GREGORIO ANDOLANA and JOKER ARROYO as
members of the House of Representatives and as taxpayers; NICANOR P. PERLAS and
HORACIO R. MORALES, both as taxpayers; CIVIL LIBERTIES UNION, NATIONAL ECONOMIC
PROTECTIONISM ASSOCIATION, CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES,
LIKAS-KAYANG KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL RECONSTRUCTION
MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG PILIPINAS, INC., and
PHILIPPINE PEASANT INSTITUTE, in representation of various taxpayers and as
non-governmental organizations, petitioners, vs. EDGARDO ANGARA, ALBERTO
ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON ALVAREZ, AGAPITO AQUINO, RODOLFO
BIAZON, NEPTALI GONZALES, ERNESTO HERRERA, JOSE LINA, GLORIA MACAPAGAL-ARROYO,
ORLANDO MERCADO, BLAS OPLE, JOHN OSMEA, SANTANINA RASUL, RAMON REVILLA, RAUL
ROCO, FRANCISCO TATAD and FREDDIE WEBB, in their respective capacities as
members of the Philippine Senate who concurred in the ratification by the
President of the Philippines of the Agreement Establishing the World Trade
Organization; SALVADOR ENRIQUEZ, in his capacity as Secretary of Budget and
Management; CARIDAD VALDEHUESA, in her capacity as National Treasurer; RIZALINO
NAVARRO, in his capacity as Secretary of Trade and Industry; ROBERTO SEBASTIAN,
in his capacity as Secretary of Agriculture; ROBERTO DE OCAMPO, in his capacity
as Secretary of Finance; ROBERTO ROMULO, in his capacity as Secretary of
Foreign Affairs; and TEOFISTO T. GUINGONA, in his capacity as Executive
Secretary, respondents.

D E C I S I O N

PANGANIBAN, J.:

The emergence on January 1, 1995 of the World Trade Organization,
abetted by the membership thereto of the vast majority of countries has
revolutionized international business and economic relations amongst
states.It has irreversibly propelled
the world towards trade liberalization and economic globalization.Liberalization, globalization, deregulation
and privatization, the third-millennium buzz words, are ushering in a new
borderless world of business by sweeping away as mere historical relics the
heretofore traditional modes of promoting and protecting national economies
like tariffs, export subsidies, import quotas, quantitative restrictions,tax exemptions and currency controls.Finding market niches and becoming the best
in specific industries in a market-driven and export-oriented global scenario
are replacing age-old beggar-thy-neighbor policies that unilaterally protect
weak and inefficient domestic producers of goods and services.In the words of Peter Drucker, the
well-known management guru, Increased participation in the world economy has
become the key to domestic economic growth and prosperity.

Brief Historical Background

To hasten worldwide recovery from the devastation wrought by the
Second World War, plans for the establishment of three multilateral
institutions -- inspired by that grand political body, the United Nations --
were discussed at Dumbarton Oaks and Bretton Woods.The first was the World Bank (WB) which was to address the
rehabilitation and reconstruction of war-ravaged and later developing
countries; the second, the International Monetary Fund (IMF) which was
to deal with currency problems; and the third, the International Trade
Organization (ITO), which was to foster order and predictability in world trade
and to minimize unilateral protectionist policies that invite challenge, even
retaliation, from other states.However, for a variety of reasons, including its non-ratification by the
United States, the ITO, unlike the IMF and WB, never took off.What remained was only GATT -- the General
Agreement on Tariffs and Trade.GATT
was a collection of treaties governing access to the economies of treaty
adherents with no institutionalized body administering the agreements or
dependable system of dispute settlement.

After half a century and several dizzying rounds of negotiations,
principally the Kennedy Round, the Tokyo Round and the Uruguay Round, the world
finally gave birth to that administering body -- the World Trade Organization
-- with the signing of the Final Act in Marrakesh, Morocco and the ratification
of the WTO Agreement by its members.[1]

Like many other developing countries, the Philippines joined WTO
as a founding member with the goal, as articulated by President Fidel V. Ramos
in two letters to the Senate (infra), of improving Philippine access to
foreign markets, especially its major trading partners, through the reduction
of tariffs on its exports, particularly agricultural and industrial
products.The Presidentalso saw in the WTO the opening of new
opportunities for the services sector x x x, (the reduction of) costs and
uncertainty associated with exporting x x x, and (the attraction of) more
investments into the country.Although
the Chief Executive did not expressly mention it in his letter, the Philippines
- - and this is of special interest to the legal profession - - will benefit
from the WTO system of dispute settlement by judicial adjudication through the
independent WTO settlement bodies called (1) Dispute Settlement Panels and (2)
Appellate Tribunal.Heretofore, trade
disputes were settled mainly through negotiations where solutions were arrived
at frequently on the basis of relative bargaining strengths, and where
naturally, weak and underdeveloped countries were at a disadvantage.

The Petition in Brief

Arguing mainly (1) that the WTOrequires the Philippines to place nationals and products of
member-countries on the same footing as Filipinos and local products and (2)
that the WTO intrudes, limits and/or impairs the constitutional powers of
both Congress and the Supreme Court, the instant petition before this Court
assails the WTO Agreement for violating the mandate of the 1987 Constitution to
develop a self-reliant and independent national economy effectively controlled
by Filipinos x x x (to) give preference to qualified Filipinos (and to) promote
the preferential use of Filipino labor, domestic materials and locally produced
goods.

Simply stated, does the Philippine Constitution prohibit
Philippine participation in worldwide trade liberalization and economic globalization?Does it prescribe Philippine integration
into a global economy that is liberalized, deregulated and privatized?These are the main questions raised in this
petition for certiorari, prohibition and mandamus under Rule 65
of the Rules of Court praying (1) for the nullification, on constitutional
grounds, of the concurrence of the Philippine Senate in the ratification by the
President of the Philippines of the Agreement Establishing the World Trade
Organization (WTO Agreement, for brevity) and (2) for the prohibition of its
implementation and enforcement through the release and utilization of public
funds, the assignment of public officials and employees, as well as the use of
government properties and resources by respondent-heads of various executive
offices concerned therewith.This
concurrence is embodied in Senate Resolution No. 97, dated December 14, 1994.

The Facts

On April 15, 1994, Respondent Rizalino Navarro, then Secretary of
theDepartmentofTradeandIndustry (Secretary Navarro, for brevity),
representing the Government of the Republic of the Philippines, signed in
Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay Round of
Multilateral Negotiations (Final Act, for brevity).

By signing the Final Act,[2] Secretary Navarro on behalf of the Republic
of the Philippines, agreed:

(a) to submit, as appropriate, the WTO Agreement for the
consideration of their respective competent authorities, with a view to seeking
approval of the Agreement in accordance with their procedures; and

(b) to adopt the Ministerial Declarations and Decisions.

On August 12, 1994, the members of the Philippine Senate received
a letter dated August 11, 1994 from the President of the Philippines,[3] stating among others that the Uruguay Round
Final Act is hereby submitted to the Senate for its concurrence pursuant to
Section 21, Article VII of the Constitution.

On August 13, 1994, the members of the Philippine Senate received
another letter from the President of the Philippines[4] likewise dated August 11, 1994, which stated
among others that the Uruguay Round Final Act, the Agreement Establishing the
World Trade Organization, the Ministerial Declarations and Decisions, and the
Understanding on Commitments in Financial Services are hereby submitted to the
Senate for its concurrence pursuant to Section 21, Article VII of the
Constitution.

On December 9, 1994, the President of the Philippines certified
the necessity of the immediate adoption of P.S. 1083, a resolution entitled
Concurring in the Ratification of the Agreement Establishing the World Trade
Organization.[5]

On December 14, 1994, the Philippine Senate adopted Resolution
No. 97 which Resolved, as it is hereby resolved, that the Senate concur,
asit hereby concurs, in the
ratification by the President of the Philippines ofthe Agreement Establishing the World Trade Organization.[6] The text of the WTO Agreement is written on
pages 137 et seq. of Volume I of the 36-volume Uruguay Round of
Multilateral Trade Negotiations and includes various agreements and
associated legal instruments (identified in the said Agreement as Annexes 1, 2
and 3 thereto and collectively referred to as Multilateral Trade Agreements,
for brevity) as follows:

ANNEX 1

Annex 1A:Multilateral
Agreement on Trade in Goods

General Agreement
on Tariffs and Trade 1994

Agreement on
Agriculture

Agreement on the
Application of Sanitary and

Phytosanitary Measures

Agreement on
Textiles and Clothing

Agreement on
Technical Barriers to Trade

Agreement on Trade-Related
Investment Measures

Agreement on
Implementation of Article VI of theGeneral Agreement on Tariffs and Trade 1994

Agreement on
Implementation of Article VII of the General on Tariffs and Trade 1994

Understanding on Rules
and Procedures Governing the Settlement of Disputes

ANNEX3

Trade Policy Review Mechanism

On December 16, 1994, the President of the Philippines signed[7] the Instrument of Ratification, declaring:

NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of
the Republic of the Philippines, after having seen and considered the
aforementioned Agreement Establishing the World Trade Organization and the
agreements and associated legal instruments included in Annexes one (1), two
(2) and three (3) of that Agreement which are integral parts thereof, signed at
Marrakesh, Morocco on 15 April 1994, do hereby ratify and confirm the same and
every Article and Clause thereof.

To emphasize, the WTO Agreement ratified by the President of the
Philippines is composed of the Agreement Proper and the associated legal
instruments included in Annexes one (1), two (2) and three (3) of that
Agreement which are integral parts thereof.

On the other hand, the Final Act signed by Secretary Navarro
embodies not only the WTO Agreement (and its integral annexes aforementioned)
but also (1) the Ministerial Declarations and Decisions and (2) the
Understanding on Commitments in Financial Services.In his Memorandum dated May 13, 1996,[8]the Solicitor General describes
these two latter documents as follows:

The Ministerial Decisions and Declarations are twenty-five
declarations and decisions on a wide range of matters, such as measures in
favor of least developed countries, notification procedures, relationship of
WTO with the International Monetary Fund (IMF), and agreements on technical
barriers to trade and on dispute settlement.

The Understanding on Commitments in Financial Services dwell on,
among other things, standstill or limitations and qualifications of commitments
to existing non-conforming measures, market access, national treatment, and
definitions of non-resident supplier of financial services, commercial presence
and new financial service.

On December 29, 1994, the present petition was filed.After careful deliberation on respondents
comment and petitioners reply thereto, the Court resolved on December 12,
1995, to give due course to the petition, and the parties thereafter filed
their respective memoranda. The Court
also requested the Honorable Lilia R. Bautista, the Philippine Ambassador to
the United Nations stationed in Geneva, Switzerland, to submit a paper,
hereafter referred to as Bautista Paper,[9] for brevity, (1) providing a historical
background of and (2) summarizing the said agreements.

During the Oral Argument held on August 27, 1996, the Court
directed:

(a) the petitioners to submit the (1) Senate Committee Report on the
matter in controversy and (2) the transcript of proceedings/hearings in the
Senate; and

(b) the Solicitor General, as counsel for respondents, to file (1)
a list of Philippine treaties signed prior to the Philippine adherence to the
WTO Agreement, which derogate from Philippine sovereignty and (2) copies of the
multi-volume WTO Agreement and other documents mentioned in the Final Act, as
soon as possible.

After receipt of the foregoing documents, the Court said it would
consider the case submitted for resolution.In a Compliance dated September 16, 1996, the Solicitor General
submitted a printed copy of the 36-volume Uruguay Round of Multilateral
Trade Negotiations, and in another Compliance dated October 24, 1996, he
listed the various bilateral or multilateral treaties or international
instruments involving derogation of Philippine sovereignty.Petitioners, on the other hand, submitted
their Compliance dated January 28, 1997, on January 30, 1997.

The Issues

In their Memorandum dated March 11, 1996, petitioners summarized
the issues as follows:

A.Whether the petition
presents a political question or is otherwise not justiciable.

B.Whether the petitioner members of the Senate
who participated in the deliberations and voting leading to the concurrence are
estopped from impugning the validity of the Agreement Establishing the World
Trade Organization or of the validity of the concurrence.

C.Whether the provisions of the Agreement
Establishing the World Trade Organization contravene the provisions of Sec. 19,
Article II, and Secs. 10 and 12, Article XII, all of the 1987 Philippine
Constitution.

D.Whether provisions of the Agreement
Establishing the World Trade Organization unduly limit, restrict and impair
Philippine sovereignty specifically the legislative power which, under Sec. 2,
Article VI, 1987 Philippine Constitution is vested in the Congress of the
Philippines;

E.Whether provisions of the Agreement
Establishing the World Trade Organization interfere with the exercise of
judicial power.

F.Whether the respondent members of the
Senate acted in grave abuse of discretion amounting to lack or excess of
jurisdiction when they voted for concurrence in the ratification of the
constitutionally-infirm Agreement Establishing the World Trade Organization.

G.Whether the respondent members of the Senate
acted in grave abuse of discretion amounting to lack or excess of jurisdiction
when they concurred only in the ratification of the Agreement Establishing the
World Trade Organization, and not with the Presidential submission which
included the Final Act, Ministerial Declaration and Decisions, and the
Understanding on Commitments in Financial Services.

On the other hand, the Solicitor General as counsel for
respondents synthesized the several issues raised by petitioners into the
following:[10]

1.Whether or not the
provisions of the Agreement Establishing the World Trade Organization and the
Agreements and Associated Legal Instruments included in Annexes one (1), two
(2) and three (3) of that agreement cited by petitioners directly contravene
or undermine the letter, spirit and intent of Section 19, Article II and
Sections 10 and 12, Article XII of the 1987 Constitution.

2.Whether or not certain
provisions of the Agreement unduly limit, restrict or impair the exercise of
legislative power by Congress.

3.Whether or not certain
provisions of the Agreement impair the exercise of judicial power by this
Honorable Court in promulgating the rules of evidence.

4.Whether or not the
concurrence of the Senate in the ratification by the President of the
Philippines of the Agreement establishing the World Trade Organization implied
rejection of the treaty embodied in the Final Act.

By raising and arguing only four issues against the seven
presented by petitioners, the Solicitor General has effectively ignored three,
namely: (1) whether the petition presents a political question or is otherwise
not justiciable; (2) whether petitioner-members of the Senate (Wigberto E.
Taada and Anna Dominique Coseteng) are estopped from joining this suit; and
(3) whether the respondent-members of the Senate acted in grave abuse of
discretion when they voted for concurrence in the ratification of the WTO
Agreement.The foregoing notwithstanding,
this Court resolved to deal with these three issues thus:

(1)The political
question issue -- being very fundamental and vital, and being a matter that
probes into the very jurisdiction of this Court to hear and decide this case --
was deliberated upon by the Court and will thus be ruled upon as the first
issue;

(2)The matter of estoppel
will not be taken up because this defense is waivable and the respondents have
effectively waived it by not pursuing it in any of their pleadings; in any
event, this issue, even if ruled in respondents favor, will not cause the
petitions dismissal as there are petitioners other than the two senators, who
are not vulnerable to the defense of estoppel; and

(3)The issue of alleged
grave abuse of discretion on the part of the respondent senators will be taken
up as an integral part of the disposition of the four issues raised by the
Solicitor General.

During its deliberations on the case, the Court noted that the
respondents did not question the locus standi of petitioners.Hence, they are also deemed to have waived
the benefit of such issue.They
probably realized that grave constitutional issues, expenditures of public
funds and serious international commitments of the nation are involved here,
and that transcendental public interest requires that the substantive issues be
met head on and decided on the merits, rather than skirted or deflected by
procedural matters.[11]

To recapitulate, the issues that will be ruled upon shortly are:

(1) DOES THE
PETITION PRESENT A JUSTICIABLE CONTROVERSY?OTHERWISE STATED, DOES THE PETITION INVOLVE A POLITICAL QUESTION OVER
WHICH THIS COURT HAS NO JURISDICTION?

(2) DO THE
PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES CONTRAVENE SEC. 19,
ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF THE PHILIPPINE CONSTITUTION?

(3)DO THE PROVISIONS OF SAID AGREEMENT AND ITS
ANNEXES LIMIT, RESTRICT, OR IMPAIR THE EXERCISE OF LEGISLATIVE POWER BY
CONGRESS?

(4) DO SAID
PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE EXERCISE OF JUDICIAL POWER BY THIS
COURT IN PROMULGATING RULES ON EVIDENCE?

(5) WAS THE
CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND ITS ANNEXES SUFFICIENT
AND/OR VALID, CONSIDERING THAT IT DID NOT INCLUDE THE FINAL ACT, MINISTERIAL
DECLARATIONS AND DECISIONS, AND THE UNDERSTANDING ON COMMITMENTS IN FINANCIAL
SERVICES?

The First Issue:Does
the Court Have Jurisdiction Over the Controversy?

In seeking to nullify an act of the Philippine Senate on the
ground that it contravenes the Constitution, the petition no doubt raises a
justiciable controversy.Where an
action of the legislative branch is seriously alleged to have infringed the
Constitution, it becomes not only the right but in fact the duty of the
judiciary to settle the dispute.The
question thus posed is judicial rather than political.The duty (to adjudicate) remains to assure
that the supremacy of the Constitution is upheld.[12] Once a controversy as to the application or
interpretation of a constitutional provision is raised before this Court (as in
the instant case), it becomes a legal issue which the Court is bound by
constitutional mandate to decide.[13]

The jurisdiction of this Court to adjudicate the matters[14] raised in the petition is clearly set out in
the 1987 Constitution,[15]as
follows:

Judicial power includes the duty of the courts of justice to
settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the government.

The foregoing text emphasizes the judicial departments duty and
power to strike down grave abuse of discretion on the part of any branch or
instrumentality of government including Congress.It is an innovation in our political law.[16]As explained by former Chief Justice Roberto Concepcion,[17] the judiciary is the final arbiter on the
question of whether or not a branch of government or any of its officials has
acted without jurisdiction or in excess of jurisdiction or so capriciously as
to constitute an abuse of discretion amounting to excess of jurisdiction.This is not only a judicial power but a duty
to pass judgment on matters of this nature.

As this Court has repeatedly and firmly emphasized in many cases,[18]it will not shirk, digress from or abandon its sacred duty and
authority to uphold the Constitution in matters that involve grave abuse of
discretion brought before it in appropriate cases, committed by any officer,
agency, instrumentality or department of the government.

As the petition alleges grave abuse of discretion and as there is
no other plain, speedy or adequate remedy in the ordinary course of law, we
have no hesitation at all in holding that this petition should be given due
course and the vital questions raised therein ruled upon under Rule 65 of the
Rules of Court.Indeed, certiorari,
prohibition and mandamus are appropriate remedies to raise
constitutional issues and to review and/or prohibit/nullify, when proper, acts
of legislative and executive officials.On this, we have no equivocation.

We should stress that, in deciding to take jurisdiction over this
petition, this Court will not review the wisdom of the decision of the President
and the Senate in enlisting the country into the WTO, or pass upon the merits
of trade liberalization as a policy espoused by said international body.Neither will it rule on the propriety
of the governments economic policy of reducing/removing tariffs, taxes,
subsidies, quantitative restrictions, and other import/trade barriers.Rather, it will only exercise its
constitutional duty to determine whether or not there had been a grave abuse
of discretion amounting to lack or excess of jurisdiction on the part of the
Senate in ratifying the WTO Agreement and its three annexes.

Second Issue:The
WTO Agreement and Economic Nationalism

This is the lis mota, the main issue, raised by the
petition.

Petitioners vigorously argue that the letter, spirit and intent
of the Constitution mandating economic nationalism are violated by the
so-called parity provisions and national treatment clauses scattered in
various parts not only of the WTO Agreement and its annexes but also in the
Ministerial Decisions and Declarations and in the Understanding on Commitments
in Financial Services.

Specifically, the flagship constitutional provisions referred
to are Sec. 19, Article II, and Secs. 10 and 12, Article XII, of the
Constitution, which are worded as follows:

Article II

DECLARATION OF PRINCIPLES
AND STATE POLICIES

xxxxxxxx

Sec. 19.The State shall
develop a self-reliant and independent national economy effectively controlled
by Filipinos.

In the grant of rights, privileges, and concessions covering the
national economy and patrimony, the State shall give preference to qualified
Filipinos.

xxxxxxxx

Sec. 12.The State shall
promote the preferential use of Filipino labor, domestic materials and locally
produced goods, and adopt measures that help make them competitive.

Petitioners aver that these sacred constitutional principles are
desecrated by the following WTO provisions quoted in their memorandum:[19]

a)In the area of
investment measures related to trade in goods (TRIMS, for brevity):

Article 2

National Treatment and
Quantitative Restrictions.

1. Without prejudice
to other rights and obligations under GATT 1994.no Member shall apply any TRIM that is inconsistent with the
provisions of Article III or ArticleXI
of GATT 1994.

2. An Illustrative
list of TRIMS that are inconsistent with the obligations of general elimination
of quantitative restrictions provided for in paragraph I of Article XI of GATT
1994 is contained in the Annex to this Agreement.(Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay
Round, Legal Instruments, p.22121, emphasis supplied).

The Annex referred to reads as follows:

ANNEX

Illustrative List

1. TRIMS that are
inconsistent with the obligation of national treatment provided for in
paragraph 4 of Article III of GATT 1994 include those which are mandatory or
enforceable under domestic law or under administrative rulings, or compliance
with which is necessary to obtain an advantage, and which require:

(a)the purchase or use by an enterprise of
products of domestic origin or from any domestic source, whether specified in
terms of particular products, in terms of volume or value of products, or in
terms of proportion of volume or value of its local production; or

(b)that an enterprises purchases or use of
imported products be limited to an amount related to the volume or value of
local products that it exports.

2.TRIMS that are inconsistent with the
obligations of general elimination of quantitative restrictions provided for in
paragraph 1 of Article XI of GATT 1994 include those which are mandatory or
enforceable under domestic laws or under administrative rulings, or compliance
with which is necessary to obtain an advantage, and which restrict:

(a)the importation by an enterprise of products
used in or related to the local production that it exports;

(b) the importation
by an enterprise of products used in or related to its local production by
restricting its access to foreign exchange inflows attributable to the
enterprise; or

(c)the exportation or sale for export specified
in terms of particular products, in terms of volume or value of products, or in
terms of a preparation of volume or value of its local production.(Annex to the Agreement on Trade-Related
Investment Measures, Vol. 27, Uruguay Round Legal Documents, p.22125, emphasis
supplied).

The paragraph 4 of Article III of GATT 1994 referred to is quoted
as follows:

The products of the territory of any contracting party imported
into the territory of any other contracting party shall be accorded
treatment no less favorable than that accorded to like products of national
origin in respect of laws, regulations and requirements affecting their
internal sale, offering for sale, purchase, transportation, distribution or
use.the provisions of this paragraph
shall not prevent the application of differential internal transportation
charges which are based exclusively on the economic operation of the means of
transport and not on the nationality of the product.(Article III, GATT 1947, as amended by the Protocol Modifying Part
II, and Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in relation to
paragraph 1(a) of the General Agreement on Tariffs and Trade 1994, Vol. 1,
Uruguay Round, Legal Instruments p.177, emphasis supplied).

b)In the area of trade
related aspects of intellectual property rights (TRIPS, for brevity):

Each Member shall accord to the nationals of other Members
treatment no less favourable than that it accords to its own nationals with
regard to the protection of intellectual property...(par. 1, Article 3, Agreement on Trade-Related Aspect of
Intellectual Property rights, Vol. 31, Uruguay Round, Legal Instruments,
p.25432 (emphasis supplied)

(c)In the area of the
General Agreement on Trade in Services:

National Treatment

1. In the sectors inscribed
in its schedule, and subject to any conditions and qualifications set out
therein, each Member shall accord to services and service suppliers of any
other Member, in respect of all measures affecting the supply of services, treatment
no less favourable than it accords to its own like services and service
suppliers.

2. A Member may meet
the requirement of paragraph I by according to services and service suppliers
of any other Member, either formally identical treatment or formally different
treatment to that it accords to its own like services and service suppliers.

3. Formally identical
or formally different treatment shall be considered to be less favourable if it
modifies the conditions of completion in favour of services or service
suppliers of the Member compared to like services or service suppliers of any
other Member.(Article XVII, General
Agreement on Trade in Services, Vol. 28, Uruguay Round Legal Instruments,
p.22610 emphasis supplied).

It is petitioners position that the foregoing national
treatment and parity provisions of the WTO Agreement place nationals and
products of member countries on the same footing as Filipinos and local
products,in contravention of the
Filipino Firstpolicy of the
Constitution.They allegedly render
meaningless the phrase effectively controlled by Filipinos.The constitutional conflict becomes more
manifest when viewed in the context of the clear duty imposed on the
Philippines as a WTO member to ensure the conformity of its laws, regulations
and administrative procedures with its obligations as provided in the annexed
agreements.[20] Petitioners further argue that these
provisions contravene constitutional limitations on the role exports play in
national development and negate the preferential treatment accorded to Filipino
labor, domestic materials and locally produced goods.

On the other hand, respondents through the Solicitor General
counter (1) that such Charterprovisions are not self-executing and merely set out general policies;
(2) that these nationalistic portions of the Constitution invoked by
petitioners should not be read in isolation but should be related to other
relevant provisions of Art. XII, particularly Secs. 1 and 13 thereof; (3) that
read properly, the cited WTO clauses do not conflict with the Constitution; and
(4) that the WTO Agreement contains sufficient provisions to protect developing
countries like the Philippines from the harshness of sudden trade
liberalization.

We shall now discuss and rule on these arguments.

Declaration of
Principles Not Self-Executing

By its very title, Article II of the Constitution is a
declaration of principles and state policies.The counterpart of this article in the 1935 Constitution[21]is called the basic political creed of
the nationby Dean Vicente Sinco.[22] These principles in Article II are not
intended to be self-executing principles ready for enforcement through the
courts.[23] They are used by the judiciary as aids or as
guides in the exercise of its power of judicial review, and by the legislature
in its enactment of laws.As held in
the leading case of Kilosbayan, Incorporated vs. Morato,[24]the principles and state policies enumerated in Article II and some
sections of Article XII are not self-executing provisions, the disregard of which
can give rise to a cause of action in the courts.They do not embody judicially enforceable constitutional rights
but guidelines for legislation.

In the same light, we held in Basco vs. Pagcor[25]that broad constitutional
principles need legislative enactments to implement them, thus:

On petitioners allegation that P.D. 1869 violates Sections 11
(Personal Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13
(Social Justice) of Article XIII and Section 2 (Educational Values) of Article
XIV of the 1987 Constitution, suffice it to state also that these are merely
statements of principles and policies.As such, they are basically not self-executing, meaning a law should be
passed by Congress to clearly define and effectuate such principles.

In general, therefore, the 1935 provisions were not intended to be
self-executing principles ready for enforcement through the courts.They were rather directives addressed to the
executive and to the legislature.If
the executive and the legislature failed to heed the directives of the article,
the available remedy was not judicial but political.The electorate could express their displeasure with the failure
of the executive and the legislature through the language of the ballot.(Bernas, Vol. II, p. 2).

The reasons for denying a cause of action to an alleged
infringement of broad constitutional principles are sourced from basic
considerations of due process and the lack of judicial authority to wade into
the uncharted ocean of social and economic policy making.Mr. Justice Florentino P. Feliciano in his
concurring opinion in Oposa vs. Factoran, Jr.,[26] explained these reasons as follows:

My suggestion is simply that petitioners must, before the trial
court, show a more specific legal right -- a right cast in language of a
significantly lower order of generality than Article II (15) of the
Constitution -- that is or may be violated by the actions, or failures to act,
imputed to the public respondent by petitioners so that the trial court can validly
render judgment granting all or part of the relief prayed for.To my mind, the court should be understood
as simply saying that such a more specific legal right or rights may well exist
in our corpus of law, considering the general policy principles found in the
Constitution and the existence of the Philippine Environment Code, and that the
trial court should have given petitioners an effective opportunity so to
demonstrate, instead of aborting the proceedings on a motion to dismiss.

It seems to me important that the legal right which is an essential
component of a cause of action be a specific, operable legal right, rather than
a constitutional or statutory policy, for at least two (2) reasons.One is that unless the legal right claimed
to have been violated or disregarded is given specification in operational
terms, defendants may well be unable to defend themselves intelligently and
effectively; in other words, there are due process dimensions to this matter.

The second is a broader-gauge consideration -- where a specific
violation of law or applicable regulation is not alleged or proved, petitioners
can be expected to fall back on the expanded conception of judicial power in
the second paragraph of Section 1 of Article VIII of the Constitution which reads:

Section 1.x x x

Judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.(Emphases supplied)

When substantive standards as general as
the right to a balanced and healthy ecology and the right to health are
combined with remedial standards as broad ranging as a grave abuse of
discretion amounting to lack or excess of jurisdiction, the result will be, it
is respectfully submitted, to propel courts into the uncharted ocean of social
and economic policy making.At least in
respect of the vast area of environmental protection and management, our courts
have no claim to special technical competence and experience and professional
qualification.Where no specific,
operable norms and standards are shown to exist, then the policy making
departments -- the legislative and executive departments -- must be given a
real and effective opportunity to fashion and promulgate those norms and
standards, and to implement them before the courts should intervene.

Economic
Nationalism Should Be Read with Other Constitutional Mandates to Attain
Balanced Development of Economy

On the other hand, Secs. 10 and 12 of Article XII, apart from
merely laying down general principles relating to the national economy and
patrimony, should be read and understood in relation to the other sections in
said article, especially Secs. 1 and 13 thereof which read:

Section 1. The goals of the national economy are a more equitable
distribution of opportunities, income, and wealth; a sustained increase in the
amount of goods and services produced by the nation for the benefit of the
people; and an expanding productivity as the key to raising the quality of life
for all, especially the underprivileged.

The State shall promote industrialization and full employment based
on sound agricultural development and agrarian reform, through industries that
make full and efficient use of human and natural resources, and which are
competitive in both domestic and foreign markets.However, the State shall protect Filipino enterprises against
unfair foreign competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all
regions of the country shall be given optimum opportunity to develop.x x x

x x xx
x xx
x x

Sec. 13.The State shall pursue
a trade policy that serves the general welfare and utilizes all forms and
arrangements of exchange on the basis of equality and reciprocity.

As pointed out by the Solicitor General, Sec. 1 lays down the
basic goals of national economic development, as follows:

1.A more equitable
distribution of opportunities, income and wealth;

2.A sustained increase
in the amount of goods and services provided by the nation for the benefit of
the people; and

3.An expanding
productivity as the key to raising the quality of life for all especially the
underprivileged.

With these goals in context, the Constitution then ordains the
ideals of economic nationalism (1) by expressing preference in favor of
qualified Filipinos in the grant of rights, privileges and concessions
covering the national economy and patrimony[27] and in the use of Filipino labor, domestic
materials and locally-produced goods; (2) by mandating the State to adopt
measures that help make them competitive;[28] and (3) by requiring the State to develop a
self-reliant and independent national economy effectively controlled by
Filipinos.[29] In similar language, the Constitution takes
into account the realities of the outside world as it requires the pursuit of
a trade policy that serves the general welfare and utilizes all forms and
arrangements of exchange on the basis of equality and reciprocity;[30] and speaks of industries which are
competitive in both domestic and foreign markets as well as of the protection
of Filipino enterprises against unfair foreign competition and trade
practices.

It is true that in the recent case of Manila Prince Hotel vs.
Government Service Insurance System, et al.,[31] this Court held that Sec. 10, second par.,
Art. XII of the 1987 Constitution is a mandatory, positive command which is
complete in itself and which needs no further guidelines or implementing laws
or rules for its enforcement.From its
very words the provision does not require any legislation to put it in
operation.It is per se
judicially enforceable. However, as
the constitutional provision itself states, it is enforceable only in regard to
the grants of rights, privileges and concessions covering national economy and
patrimony and not to every aspect of trade and commerce.It refers to exceptions rather than the
rule.The issue here is not whether
this paragraph of Sec. 10 of Art. XII is self-executing or not.Rather, the issue is whether, as a rule,
there are enough balancing provisions in the Constitution to allow the Senate
to ratify the Philippine concurrence in the WTO Agreement.And we hold that there are.

All told, while the Constitution indeed mandates a bias in favor
of Filipino goods, services, labor and enterprises, at the same time, it
recognizes the need for business exchange with the rest of the world on the
bases of equality and reciprocity and limits protection of Filipino enterprises
only against foreign competition and trade practices that are unfair.[32] In other words, the Constitution did not
intend to pursue an isolationist policy.It did not shut out foreign investments, goods and services in the
development of the Philippine economy.While the Constitution does not encourage the unlimited entry of foreign
goods, services and investments into the country, it does not prohibit them
either.In fact, it allows an exchange
on the basis of equality and reciprocity, frowning only on foreign competition
that is unfair.

WTO Recognizes Need
to Protect Weak Economies

Upon the other hand, respondents maintain that the WTO itself has
some built-in advantages to protect weak and developing economies, which
comprise the vast majority of its members.Unlike in the UN where major states have permanent seats and veto powers
in the Security Council, in the WTO, decisions are made on the basis of
sovereign equality, with each members vote equal in weight to that of any
other.There is no WTO equivalent of
the UN Security Council.

WTO decides by consensus whenever possible, otherwise, decisions
of the Ministerial Conference and the General Council shall be taken by the
majority of the votes cast, except in cases of interpretation of the Agreement
or waiver of the obligation of a member which would require three fourths
vote.Amendments would require two thirds
vote in general.Amendments to MFN
provisions and the Amendments provision will require assent of all
members.Any member may withdraw from
the Agreement upon the expiration of six months from the date of notice of
withdrawals.[33]

Hence, poor countries can protect their common interests more
effectively through the WTO than through one-on-one negotiations with developed
countries.Within the WTO, developing
countries can form powerful blocs to push their economic agenda more decisively
than outside the Organization.This is
not merely a matter of practical alliances but a negotiating strategy rooted in
law.Thus, the basic principles
underlying the WTO Agreement recognize the need of developing countries like
the Philippines to share in the growth in international trade commensurate with
the needs of their economic development.These basic principles are found in the preamble[34]of the WTO Agreement as follows:

The Parties to this Agreement,

Recognizing that their relations in the field of trade and economic
endeavour should be conducted with a view to raising standards of living,
ensuring full employment and a large and steadily growing volume of real income
and effective demand, and expanding the production of and trade in goods and
services, while allowing for the optimal use of the worlds resources in
accordance with the objective of sustainable development, seeking both to
protect and preserve the environment and to enhance the means for doing so in
a manner consistent with their respective needs and concerns at different
levels of economic development,

Recognizing further that there is need for positive efforts
designed to ensure that developing countries, and especially the least
developed among them, secure a share in the growth in international trade
commensurate with the needs of their economic development,

Being desirous of contributing to these objectives by entering into
reciprocal and mutually advantageous arrangements directed to the substantial
reduction of tariffs and other barriers to trade and to the elimination of
discriminatory treatment in international trade relations,

Resolved, therefore, to develop an integrated, more viable and
durable multilateral trading system encompassing the General Agreement on
Tariffs and Trade, the results of past trade liberalization efforts, and all of
the results of the Uruguay Round of Multilateral Trade Negotiations,

Determined to preserve the basic principles and to further the
objectives underlying this multilateral trading system,x x x.(underscoring supplied.)

Specific WTO Provisos
Protect Developing Countries

So too, the Solicitor General points out that pursuant to and
consistent with the foregoing basic principles, the WTO Agreement grants
developing countries a more lenient treatment, giving their domestic industries
some protection from the rush of foreign competition.Thus, with respect to tariffs in general, preferential treatment
is given to developing countries in terms of the amount of tariff reduction
and the period within which the reduction is to be spread out.Specifically, GATT requires an average
tariff reduction rate of 36% for developed countries to be effected within a period
of six (6) years while developing countries -- including the Philippines --
are required to effect an average tariff reduction of only 24% within ten
(10) years.

In respect to domestic subsidy, GATT requires developed
countries to reduce domestic support to agricultural products by 20%
over six (6) years, as compared to only 13% for developing countries to
be effected within ten (10) years.

In regard to export subsidy for agricultural products, GATT
requires developed countries to reduce their budgetary outlays for export
subsidy by 36% and export volumes receiving export subsidy by 21%
within a period of six (6) years.For developing countries, however, the reduction rate is only two-thirds
of that prescribed for developed countries and a longer period of ten (10)
years within which to effect such reduction.

Moreover, GATT itself has provided built-in protection from
unfair foreign competition and trade practices including anti-dumping measures,
countervailing measures and safeguards against import surges.Where local businesses are jeopardized by
unfair foreign competition, the Philippines can avail of these measures.There is hardly therefore any basis for the
statement that under the WTO, local industries and enterprises will all be
wiped out and that Filipinos will be deprived of control of the economy.Quite the contrary, the weaker situations of
developing nations like the Philippines have been taken into account; thus,
there would be no basis to say that in joining the WTO, the respondents have
gravely abused their discretion.True,
they have made a bold decision to steer the ship of state into the yet
uncharted sea of economic liberalization.But such decision cannot be set aside on the ground ofgrave abuse of discretion, simply because we
disagree with it or simply because we believe only in other economic
policies.As earlier stated, the Court
in taking jurisdiction of this case will not pass upon the advantages and
disadvantages of trade liberalization as an economic policy.It will only perform its constitutional duty
of determining whether the Senate committed grave abuse of discretion.

Constitution Does
Not Rule Out Foreign Competition

Furthermore, the constitutional policy of a self-reliant and
independent national economy[35] does not necessarily rule out the entry of
foreign investments, goods and services.It contemplates neither economic seclusion nor mendicancy in the
international community.As explained
by Constitutional Commissioner Bernardo Villegas, sponsor of this
constitutional policy:

Economic self-reliance is a primary objective of a developing
country that is keenly aware of overdependence on external assistance for even
its most basic needs.It does not mean
autarky or economic seclusion; rather, it means avoiding mendicancy in the
international community.Independence
refers to the freedom from undue foreign control of the national economy, especially
in such strategic industries as in the development of natural resources and
public utilities.[36]

The WTO reliance on most favored nation, national treatment,
and trade without discrimination cannot be struck down as unconstitutional as
in fact they are rules of equality and reciprocity that apply to all WTO
members.Aside from envisioning a trade
policy based on equality and reciprocity,[37] the fundamental law encourages industries
that are competitive in both domestic and foreign markets, thereby
demonstrating a clear policy against a sheltered domestic trade environment,
but one in favor of the gradual development of robust industries that can
compete with the best in the foreign markets.Indeed, Filipino managers and Filipino enterprises have shown capability
and tenacity to compete internationally.And given a free trade environment, Filipino entrepreneurs and managers
in Hongkong havedemonstrated the
Filipino capacity to grow and to prosper against the best offered under a
policy of laissez faire.

Constitution Favors
Consumers, Not Industries or Enterprises

The Constitution has not really shown any unbalanced bias in
favor of any business or enterprise, nor does it contain any specific pronouncement
that Filipino companies should be pampered with a total proscriptionofforeigncompetition.Ontheotherhand,respondentsclaim that WTO/GATT
aims to make available to the Filipino consumer the best goods and services
obtainable anywhere in the world at the most reasonable prices.Consequently, the question boils down to
whether WTO/GATT will favor the general welfare of the public at large.

Will adherence to the WTO treaty bring this ideal (of favoring
the general welfare) to reality?

Will WTO/GATT succeed in promoting the Filipinos general welfare
because it will -- as promised by its promoters -- expand the countrys exports
and generate more employment?

Will it bring more prosperity, employment, purchasing power and
quality products at the most reasonable rates to the Filipino public?

The responses to these questions involve judgment calls by our
policy makers, for which they are answerable to our people during appropriate
electoral exercises.Such questions and
the answers thereto are not subject to judicial pronouncements based on grave
abuse of discretion.

Constitution
Designed to Meet Future Events and Contingencies

No doubt, the WTO Agreement was not yet in existence when the
Constitution was drafted and ratified in 1987.That does not mean however that the Charter is necessarily flawed in the
sense that its framers might not have anticipated the advent of a borderless
world of business.By the same
token,the United Nations was not yet
in existence when the 1935 Constitution became effective.Did that necessarily mean that the then
Constitution might not have contemplated a diminution of the absoluteness of
sovereignty when the Philippines signed the UN Charter, thereby effectively
surrendering part of its control over its foreign relations to the decisions of
various UN organs like the Security Council?

It is not difficult to answer this question.Constitutions are designed to meet not only
the vagaries of contemporary events.They should be interpreted to cover even future and unknown
circumstances.It is to the credit of
its drafters that a Constitution can withstand the assaults of bigots and
infidels but at the same time bend with the refreshing winds of change
necessitated by unfolding events.As
one eminent political law writer and respected jurist[38]explains:

The Constitution must be quintessential rather than superficial,
the root and not the blossom, the base and framework only of the edifice that
is yet to rise.It is but the core of
the dream that must take shape, not in a twinkling by mandate of our delegates,
but slowly in the crucible of Filipino minds and hearts, where it will in
time develop its sinews and gradually gather its strength and finally achieve
its substance.In fine, the
Constitution cannot, like the goddess Athena, rise full-grown from the brow of
the Constitutional Convention, nor can it conjure by mere fiat an instant
Utopia.It must grow with the
society it seeks to re-structure and march apace with the progress of the race,
drawing from the vicissitudes of history the dynamism and vitality that will
keep it, far from becoming a petrified rule, a pulsing, living law attuned to
the heartbeat of the nation.

Third Issue:The
WTO Agreement and Legislative Power

The WTO Agreement provides that (e)ach Member shall ensure the
conformity of its laws, regulations and administrative procedures with its
obligations as provided in the annexed Agreements.[39] Petitioners maintain that this undertaking
unduly limits, restricts and impairs Philippine sovereignty, specifically the
legislative power which under Sec. 2, Article VI of the 1987 Philippine
Constitution is vested in the Congress of the Philippines.It is an assault on the sovereign powers of
the Philippines because this means that Congress could not pass legislation
that will be good for our national interest and general welfare if such
legislation will not conform with the WTO Agreement, which not only relates to
the trade in goods x x x but also to the flow of investments and money x x x as
well as to a whole slew of agreements on socio-cultural matters x x x.[40]

More specifically, petitioners claim that said WTO proviso
derogates from the power to tax, which is lodged in the Congress.[41] And while the Constitution allows Congress
to authorize the President to fix tariff rates, import and export quotas,
tonnage and wharfage dues, and other duties or imposts, such authority is
subject to specified limits and x x x such limitations and restrictions as
Congress may provide,[42] as in fact it did under Sec. 401 of the
Tariff and Customs Code.

Sovereignty Limited
by International Law and Treaties

This Court notes and appreciates the ferocity and passion by
which petitioners stressed their arguments on this issue.However, while sovereignty has traditionally
been deemed absolute and all-encompassing on the domestic level, it is however
subject to restrictions and limitations voluntarily agreed to by the
Philippines, expressly or impliedly, as a member of the family of nations.Unquestionably, the Constitution did not
envision a hermit-type isolation of the country from the rest of the
world.In its Declaration of Principles
and State Policies, the Constitution adopts the generally accepted principles
of international law as part of the law of the land, and adheres to the policy
of peace, equality, justice, freedom, cooperation and amity, with all
nations."[43] By the doctrine of incorporation, the
country is bound by generally accepted principles of international law, which
are considered to be automatically part of our own laws.[44] One of the oldest and most fundamental rules
in international law is pacta sunt servanda -- international agreements
must be performed in good faith.A
treaty engagement is not a mere moral obligation but creates a legally binding
obligation on the parties x x x.A
state which has contracted valid international obligations is bound to make in
its legislations such modifications as may be necessary to ensure the
fulfillment of the obligations undertaken.[45]

By their inherent nature, treaties really limit or restrict the
absoluteness of sovereignty.By their
voluntary act, nations may surrender some aspects of their state power in
exchange for greater benefits granted by or derived from a convention or
pact.After all, states, like
individuals, live with coequals, and in pursuit of mutually covenanted
objectives and benefits, they also commonly agree to limit the exercise of
their otherwise absolute rights.Thus,
treaties have been used to record agreements between States concerning such
widely diverse matters as, for example, the lease of naval bases, the sale or
cession of territory, the termination of war, the regulation of conduct of
hostilities, the formation of alliances, the regulation of commercial
relations, the settling of claims, the laying down of rules governing
conduct in peace and the establishment of international organizations.[46] The sovereignty of a state therefore cannot
in fact and in reality be considered absolute.Certain restrictions enter into the picture: (1) limitations imposed by
the very nature of membership in the family of nations and (2) limitations
imposed by treaty stipulations.As
aptly put by John F. Kennedy, Today, no nation can build its destiny
alone.The age of self-sufficient nationalism
is over.The age of interdependence is
here.[47]

UN Charter and
Other Treaties Limit Sovereignty

Thus, when the Philippines joined the United Nations as one of
its 51 charter members, it consented to restrict its sovereign rights under the
concept of sovereignty as auto-limitation.47-A Under Article 2 of the UN Charter, (a)ll
members shall give the United Nations every assistance in any action it takes
in accordance with the present Charter, and shall refrain from giving
assistance to any state against which the United Nations is taking preventive
or enforcement action.Such assistance
includes payment of its corresponding share not merely in administrative
expenses but also in expenditures for the peace-keeping operations of the
organization.In its advisory opinion
of July 20, 1961, the International Court of Justice held that money used by
the United Nations Emergency Force in the Middle East and in the Congo were
expenses of the United Nations under Article 17, paragraph 2, of the UN Charter.Hence, all its members must bear their
corresponding share in such expenses.In this sense, the Philippine Congress is restricted in its power to
appropriate.It is compelled to
appropriate funds whether it agrees with such peace-keeping expenses or not.So too, under Article 105 of the said
Charter, the UN and its representatives enjoy diplomatic privileges and
immunities, thereby limiting again the exercise of sovereignty of members
within their own territory.Another
example: although sovereign equality and domestic jurisdiction of all
members are set forth as underlying principles in the UN Charter, such provisos
are however subject to enforcement measures decided by the Security Council for
the maintenance of international peace and security under Chapter VII of the
Charter.A final example: under Article
103, (i)n the event of a conflict between the obligations of the Members of
the United Nations under the present Charter and their obligations under any
other international agreement, their obligation under the present charter shall
prevail, thus unquestionably denying the Philippines -- as a member -- the
sovereign power to make a choice as to which of conflicting obligations, if
any, to honor.

Apart from the UN Treaty, the Philippines has entered into many
other international pacts--both bilateral and multilateral -- that
involve limitations on Philippine sovereignty.These are enumerated by the Solicitor General in his Compliance dated
October 24, 1996, as follows:

(a)Bilateral convention with the United States
regarding taxes on income, where the Philippines agreed, among others, to
exempt from tax, income received in the Philippines by, among others, the
Federal Reserve Bank of the United States, the Export/Import Bank of the United
States, the Overseas Private Investment Corporation of the United States.Likewise, in said convention, wages,
salaries and similar remunerations paid by the United States to its citizens
for labor and personal services performed by them as employees or officials of
the United States are exempt from income tax by the Philippines.

(b)Bilateral agreement with Belgium, providing,
among others, for the avoidance of double taxation with respect to taxes on
income.

(c)Bilateral convention with the Kingdom of
Sweden for the avoidance of double taxation.

(d)Bilateral convention with the French
Republic for the avoidance of double taxation.

(e) Bilateral air
transport agreement with Korea where the Philippines agreed to exempt from all
customs duties, inspection fees and other duties or taxes aircrafts of South
Korea and the regular equipment, spare parts and supplies arriving with said
aircrafts.

(f) Bilateral air
service agreement with Japan, where the Philippines agreed to exempt from
customs duties, excise taxes, inspection fees and other similar duties, taxes
or charges fuel, lubricating oils, spare parts, regular equipment, stores on
board Japanese aircrafts while on Philippine soil.

(g)Bilateral air service agreement with Belgium
where the Philippines granted Belgian air carriers the same privileges as those
granted to Japanese and Korean air carriers under separate air service
agreements.

(h) Bilateral notes
with Israel for the abolition of transit and visitor visas where the
Philippines exempted Israeli nationals from the requirement of obtaining
transit or visitor visas for a sojourn in the Philippines not exceeding 59
days.

(I)Bilateral agreement with France exempting French
nationals from the requirement of obtaining transit and visitor visa for a
sojourn not exceeding 59 days.

(j)Multilateral Convention on Special Missions,
where the Philippines agreed that premises of Special Missions in the
Philippines are inviolable and its agents can not enter said premises without
consent of the Head of Mission concerned.Special Missions are also exempted from customs duties, taxes and
related charges.

(k) Multilateral
Convention on the Law of Treaties.In
this convention, the Philippines agreed to be governed by the Vienna Convention
on the Law of Treaties.

(l)Declaration of the President of the
Philippines accepting compulsory jurisdiction of the International Court of
Justice.The International Court of
Justice has jurisdiction in all legal disputes concerning the interpretation of
a treaty, any question of international law, the existence of any fact which,
if established, would constitute a breach of international obligation.

In the foregoing treaties, the Philippines has effectively agreed
to limit the exercise of its sovereign powers of taxation, eminent domain and
police power.The underlying
consideration in this partial surrender of sovereignty is the reciprocal
commitment of the other contracting states in granting the same privilege and
immunities to the Philippines, its officials and its citizens.The same reciprocity characterizes the
Philippine commitments under WTO-GATT.

International treaties, whether relating to nuclear disarmament,
human rights, the environment, the law of the sea, or trade, constrain domestic
political sovereignty through the assumption of external obligations.But unless anarchy in international
relations is preferred as an alternative, in most cases we accept that the
benefits of the reciprocal obligations involved outweigh the costs associated
with any loss of political sovereignty.(T)rade treaties that structure relations by reference to durable,
well-defined substantive norms and objective dispute resolution procedures
reduce the risks of larger countries exploiting raw economic power to bully
smaller countries, by subjecting power relations to some form of legal
ordering. In addition, smaller countries typically stand to gain
disproportionately from trade liberalization.This is due to the simple fact that liberalization will provide access
to a larger set of potential new trading relationship than in case of the
larger country gaining enhanced success to the smaller countrys market.[48]

The point is that, as shown by the foregoing treaties, a portion
of sovereignty may be waived without violating the Constitution, based on the
rationale that the Philippines adopts the generally accepted principles of
international law as part of the law of the land and adheres to the policy of x
x x cooperation and amity with all nations.

Fourth Issue:The
WTO Agreement and Judicial Power

Petitioners aver that paragraph 1, Article 34 of the General
Provisions and Basic Principles of the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS)[49]intrudes on the power of the Supreme Court to promulgate rules
concerning pleading, practice and procedures.[50]

To understand the scope and meaning of Article 34, TRIPS,[51] it will be fruitful to restate its full text
as follows:

Article 34

Process Patents: Burden of
Proof

1. For the purposes of
civil proceedings in respect of the infringement of the rights of the owner
referred to in paragraph 1(b) of Article 28, if the subject matter of a patent
is a process for obtaining a product, the judicial authorities shall have the
authority to order the defendant to prove that the process to obtain an
identical product is different from the patented process.Therefore, Members shall provide, in at
least one of the following circumstances, that any identical product when
produced without the consent of the patent owner shall, in the absence of proof
to the contrary, be deemed to have been obtained by the patented process:

(a)if the product obtained
by the patented process is new;

(b)if there is a substantial likelihood that
the identical product was made by the process and the owner of the patent has
been unable through reasonable efforts to determine the process actually used.

2. Any Member shall be
free to provide that the burden of proof indicated in paragraph 1 shall be on
the alleged infringer only if the condition referred to in subparagraph (a) is
fulfilled or only if the condition referred to in subparagraph (b) is
fulfilled.

3. In the adduction of
proof to the contrary, the legitimate interests of defendants in protecting
their manufacturing and business secrets shall be taken into account.

From the above, a WTO Member is required to provide a rule of
disputable (note the words in the absence of proof to the contrary)
presumption that a product shown to be identical to one produced with the use
of a patented process shall be deemed to have been obtained by the (illegal)
use of the said patented process, (1) where such product obtained by the
patented product is new, or (2) where there is substantial likelihood that
the identical product was made with the use of the said patented process but
the owner of the patent could not determine the exact process used in obtaining
such identical product.Hence, the
burden of proof contemplated by Article 34 should actually be understood as
the duty of the alleged patent infringer to overthrow such presumption.Such burden, properly understood, actually
refers to the burden of evidence(burden of going forward) placed on the producer of the identical (or
fake) product to show that his product was produced without the use of the
patented process.

The foregoing notwithstanding, the patent owner still has the
burden of proof since, regardless of the presumption provided under paragraph
1 of Article 34, such owner still has to introduce evidence of the existence of
the alleged identical product, the fact that it is identical to the genuine
one produced by the patented process and the fact of newness of the genuine
product or the fact of substantial likelihood that the identical product was
made by the patented process.

The foregoing should really present no problem in changing the
rules of evidence as the present law on the subject, Republic Act No. 165, as
amended, otherwise known as the Patent Law, provides a similar presumption in
cases of infringement of patented design or utility model, thus:

SEC. 60. Infringement. - Infringement of a design patent or
of a patent for utility model shall consist in unauthorized copying of the
patented design or utility model for the purpose of trade or industry in the
article or product and in the making, using or selling of the article or
product copying the patented design or utility model.Identity or substantial identity with the patented design or
utility model shall constitute evidence of copying. (underscoring
supplied)

Moreover, it should be noted that the requirement of Article 34
to provide a disputable presumption applies only if (1) the product obtained by
the patented process is NEW or (2) there is a substantial likelihood that the
identical product was made by the process and the process owner has not been
able through reasonable effort to determine the process used.Where either of these two provisos
does not obtain, members shall be free to determine the appropriate method of
implementing the provisions of TRIPS within their own internal systems and
processes.

By and large, the arguments adduced in connection with our
disposition of the third issue -- derogation of legislative power - will apply
to this fourth issue also.Suffice it
to say that the reciprocity clause more than justifies such intrusion, if any
actually exists.Besides, Article 34
does not contain an unreasonable burden, consistent as it is with due process
and the concept of adversarial dispute settlement inherent in our judicial
system.

So too, since the Philippine is a signatory to most international
conventions on patents, trademarks and copyrights, the adjustment in legislation
and rules of procedure will not be substantial.[52]

Fifth Issue:Concurrence
Only in the WTO Agreement and Not in Other Documents Contained in the Final Act

Petitioners allege that the Senate concurrence in the WTO
Agreement and its annexes -- but not in the other documents referred to in the
Final Act, namely the Ministerial Declaration and Decisions and the
Understanding on Commitments in Financial Services -- is defective and
insufficient and thus constitutes abuse of discretion.They submit that such concurrence in the WTO
Agreement alone is flawed because it is in effect a rejection of the
Final Act, which in turn was the document signed by Secretary Navarro, in
representation of the Republic upon authority of the President.They contend that the second letter of the
President to the Senate[53]which enumerated what constitutes the
Final Act should have been the subject of concurrence of the Senate.

A final act, sometimes called protocol de clture,
is an instrument which records the winding up of the proceedings of a
diplomatic conference and usually includes a reproduction of the texts of
treaties, conventions, recommendations and other acts agreed upon and signed by
the plenipotentiaries attending the conference.[54] It is not the treaty itself.It is rather a summary of the proceedings of
a protracted conference which may have taken place over several years.The text of the Final Act Embodying the
Results of the Uruguay Round of Multilateral Trade Negotiations is contained
in just one page[55] in Vol. I of the 36-volume UruguayRound
of Multilateral Trade Negotiations. By signing said Final Act, Secretary
Navarro as representative of the Republic of the Philippines undertook:

"(a) to submit,
as appropriate, the WTO Agreement for the consideration of their respective
competent authorities with a view to seeking approval of the Agreement in
accordance with their procedures; and

(b)to adopt the
Ministerial Declarations and Decisions."

The assailed Senate Resolution No. 97 expressed concurrence in
exactly what the Final Act required from its signatories, namely, concurrence
of the Senate in the WTO Agreement.

The Ministerial Declarations and Decisions were deemed adopted
without need for ratification.They
were approved by the ministers by virtue of Article XXV: 1 of GATT which
provides that representatives of the members can meet to give effect to those
provisions of this Agreement which invoke joint action, and generally with a
view to facilitating the operation and furthering the objectives of this
Agreement.[56]

The Understanding on Commitments in Financial Services also
approved in Marrakesh does not apply to the Philippines.It applies only to those 27 Members which
have indicated in their respective schedules of commitments on standstill, elimination
of monopoly, expansion of operation of existing financial service suppliers,
temporary entry of personnel, free transfer and processing of information, and
national treatment with respect to access to payment, clearing systems and
refinancing available in the normal course of business.[57]

On the other hand, the WTO Agreement itself expresses what
multilateral agreements are deemed included as its integral parts,[58] as follows:

Article II

Scope of the WTO

1. The WTO shall
provide the common institutional framework for the conduct of trade relations
among its Members in matters to the agreementsand associated legal instruments included in the Annexes to this
Agreement.

2. The Agreements and
associated legal instruments included in Annexes 1, 2, and 3 (hereinafter
referred to as Multilateral Agreements) are integral parts of this Agreement,
binding on all Members.

3. The Agreements and
associated legal instruments included in Annex 4 (hereinafter referred to as
Plurilateral Trade Agreements) are also part of this Agreement for those
Members that have accepted them, and are binding on those Members.The Plurilateral Trade Agreements do not
create either obligation or rights for Members that have not accepted them.

4. The General
Agreement on Tariffs and Trade 1994 as specified in annex 1A (hereinafter
referred to as GATT 1994) is legally distinct from the General Agreement on
Tariffs and Trade, dated 30 October 1947, annexed to the Final Act adopted at
the conclusion of the Second Session of the Preparatory Committee of the United
Nations Conference on Trade and Employment, as subsequently rectified, amended
or modified (hereinafter referred to as GATT 1947).

It should be added that the Senate was well-aware of what it was
concurring in as shown by the members deliberation on August 25, 1994.After reading the letter of President Ramos
dated August 11, 1994,[59] the senators of the Republic minutely
dissected what the Senate was concurring in, as follows: [60]

THE CHAIRMAN:Yes.Now, the question of the validity of the
submission came up in the first day hearing of this Committee yesterday.Was the observation made by Senator Taada
that what was submitted to the Senate was not the agreement on establishing the
World Trade Organization by the final act of the Uruguay Round which is not the
same as the agreement establishing the World Trade Organization?And on that basis, Senator Tolentino raised
a point of order which, however, he agreed to withdraw upon understanding that
his suggestion for an alternative solution at that time was acceptable.That suggestion was to treat the proceedings
of the Committee as being in the nature of briefings for Senators until the
question of the submission could be clarified.

And so, Secretary Romulo, in effect, is the President submitting a
new... is he making a new submission which improves on the clarity of the first
submission?

MR. ROMULO:Mr. Chairman,
to make sure that it is clear cut and there should be no misunderstanding, it
was his intention to clarify all matters by giving this letter.

THE CHAIRMAN:Thank you.

Can this Committee hear from Senator Taada and later on Senator
Tolentino since they were the ones that raised this question yesterday?

Senator Taada, please.

SEN. TAADA:Thank you,
Mr. Chairman.

Based on what Secretary Romulo has read, it would now clearly
appear that what is being submitted to the Senate for ratification is not the
Final Act of the Uruguay Round, but rather the Agreement on the World Trade
Organization as well as the Ministerial Declarations and Decisions, and the
Understanding and Commitments in Financial Services.

I am now satisfied with the wording of the new submission of
President Ramos.

SEN. TAADA.. . .of President Ramos, Mr. Chairman.

THE CHAIRMAN.Thank you, Senator
Taada.Can we hear from Senator
Tolentino?And after him Senator
Neptali Gonzales and Senator Lina.

SEN TOLENTINO, Mr. Chairman, I have not seen the new submission
actually transmitted to us but I saw the draft of his earlier, and I think it
now complies with the provisions of the Constitution, and with the Final Act
itself.The Constitution does not
require us to ratify the Final Act.It
requires us to ratify the Agreement which is now being submitted.The Final Act itself specifies what is going
to be submitted to with the governments of the participants.

In paragraph 2 of the Final Act, we read and I quote:

By signing the present Final Act, the representatives
agree:(a)to submit as appropriate the WTO Agreement for the consideration
of the respective competent authorities with a view to seeking approval of the
Agreement in accordance with their procedures.

In other words, it is not the Final Act that was agreed to be
submitted to the governments for ratification or acceptance as whatever their
constitutional procedures may provide but it is the World Trade Organization
Agreement.And if that is the one that
is being submitted now, I think it satisfies both the Constitution and the
Final Act itself.

Thank you, Mr. Chairman.

THE CHAIRMAN.Thank you,
Senator Tolentino,May I call on
Senator Gonzales.

SEN. GONZALES.Mr.
Chairman, my views on this matter are already a matter of record.And they had been adequately reflected in
the journal of yesterdays session and I dont see any need for repeating the
same.

Now, I would consider the new submission as an act ex
abudante cautela.

THE CHAIRMAN.Thank you,
Senator Gonzales.Senator Lina, do you
want to make any comment on this?

SEN. LINA.Mr.
President, I agree with the observation just made by Senator Gonzales out of
the abundance of question.Then the new
submission is,I believe, stating the
obvious and therefore I have no further comment to make.

Epilogue

In praying for the nullification of the Philippine ratification
of the WTO Agreement, petitioners are invoking this Courts constitutionally
imposed duty to determine whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the
Senate in giving its concurrence therein via Senate Resolution No. 97.Procedurally, a writ of certiorari
grounded on grave abuse of discretion may be issued by the Court under Rule 65
of the Rules of Court when it is amply shown that petitioners have no other
plain, speedy and adequate remedy in the ordinary course of law.

By grave abuse of discretion is meant such capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction.[61] Mere abuse of discretion is not enough.It must be grave abuse of discretion
as when the power is exercised in an arbitrary or despotic manner by reason of
passion or personal hostility, and must be so patent and so gross as to amount
to an evasion of a positive duty or to a virtual refusal to perform the duty
enjoined or to act at all in contemplation of law.[62] Failure on the part of the petitioner to
show grave abuse of discretion will result in the dismissal of the petition.[63]

In rendering this Decision, this Court never forgets that the
Senate, whose act is under review, is one of two sovereign houses of Congress
and is thus entitled to great respect in its actions.It is itself a constitutional body independent and coordinate,
and thus its actions are presumed regular and done in good faith.Unless convincing proof and persuasive
arguments are presented to overthrow such presumptions, this Court will resolve
every doubt in its favor.Using the
foregoing well-accepted definition of grave abuse of discretion and the
presumption of regularity in the Senates processes, this Court cannot find any
cogent reason to impute grave abuse of discretion to the Senates exercise of
its power of concurrence in the WTO Agreement granted it by Sec. 21 of Article
VII of the Constitution.[64]

It is true, as alleged by petitioners, that broad constitutional
principles require the State to develop an independent national economy
effectively controlled by Filipinos; and to protect and/or prefer Filipino
labor, products, domestic materials and locally produced goods.But it is equally true that such principles
-- while serving as judicial and legislative guides -- are not in themselves
sources of causes of action.Moreover,
there are other equally fundamental constitutional principles relied upon by the
Senate which mandate the pursuit of a trade policy that serves the general
welfare and utilizes all forms and arrangements of exchange on the basis of
equality and reciprocity and the promotion of industries which are
competitive in both domestic and foreign markets, thereby justifying its
acceptance of said treaty.So too, the
alleged impairment of sovereignty in the exercise of legislative and judicial
powers is balanced by the adoption of the generally accepted principles of
international law as part of the law of the land and the adherence of the
Constitution to the policy of cooperationand amity with all nations.

That the Senate, after deliberation and voting, voluntarily and
overwhelmingly gave its consent to the WTO Agreement thereby making it a part
of the law of the land is a legitimate exercise of its sovereign duty and
power.We find no patent and gross
arbitrariness or despotism by reason of passion or personal hostility in such
exercise.It is not impossible to
surmise that this Court, or at least some of its members, may even agree with
petitioners that it is more advantageous to the national interest to strike
down Senate Resolution No. 97.But that
is not a legal reason to attribute grave abuse of discretion to the
Senate and to nullify its decision.To
do so would constitute grave abuse in the exercise of our own judicial power
and duty.Ineludably, what the Senate
did was a valid exercise of its authority.As to whether such exercise was wise, beneficial or viable is outside
the realm of judicial inquiry and review.That is a matter between the elected policy makers and the people.As to whether the nation should join the
worldwide march toward trade liberalization and economic globalization is a
matter that our people should determine in electing their policy makers.After all, the WTO Agreement allows
withdrawal of membership, should this be the political desire of a member.

The eminent futurist John Naisbitt, author of the best seller Megatrends,
predicts an Asian Renaissance[65]where the East will become the dominant region of the world
economically, politically and culturally in the next century.He refers to the free market espoused by
WTO as the catalyst in this coming Asian ascendancy.There are at present about 31 countries
including China, Russia and Saudi Arabia negotiating for membership in the
WTO.Notwithstanding objections against
possible limitations on national sovereignty, the WTO remains as the only
viable structure for multilateral trading and the veritable forum for the
development of international trade law.The alternative to WTO is isolation, stagnation, if not economic
self-destruction.Duly enrichedwith original membership, keenly aware of
the advantages and disadvantages of globalization with its on-line experience,
and endowed with a vision of the future, the Philippines now straddles the
crossroads of an international strategy for economic prosperity and stability
in the new millennium.Let the people,
through their duly authorized elected officers, make their free choice.

[1]In Annex A of her Memorandum, dated August 8, 1996,
received by this Court on August 12, 1996, Philippine Ambassador to the United
Nations, World Trade Organization and other international organizations Lilia
R. Bautista (hereafter referred to as Bautista Paper) submitted a 46-year
Chronology of GATT as follows:

1947The
birth of GATT.On 30 October 1947,
the General Agreement on Tariffs and Trade (GATT) was signed by 23 nations at
the Palais des Nations in Geneva.The
Agreement contained tariff concessions agreed to in the first multilateral
trade negotiations and a set of rules designed to prevent these concessions
from being frustrated by restrictive trade measures.

The 23 founding contracting parties were members of the Preparatory
Committee established by the United Nations Economic and Social Council in 1946
to draft the charter of the International Trade Organization (ITO).The ITO was envisaged as the final leg of a
triad of post-War economic agencies (the other two were the International
Monetary Fund and the International Bank for Reconstruction - later the World
Bank).

In parallel with this task, the Committee members decided to
negotiate tariff concessions among themselves.From April to October 1947, the participants completed some 123
negotiations and established 20 schedules containing the tariff reductions and
bindings which became an integral part of GATT.These schedules resulting from the first Round covered some 45,000
tariff concessions and about $10 billion in trade.

GATT was conceived as an
interim measure that put into effect the commercial-policy provisions of the
ITO.In November, delegations from 56
countries met in Havana, Cuba, to consider the ITO draft as a whole.After long and difficult negotiations, some
53 countries signed the Final Act authenticating the text of the Havana Charter
in March 1948.There was no commitment,
however, from governments to ratification and, in the end, the ITO was stillborn,
leaving GATT as the only international instrument governing the conduct of
world trade.

1948Entry
into force. On 1 January 1948, GATT entered into force.The 23 founding members were: Australia,
Belgium, brazil, burma, Canada, Ceylon, Chile, China,
Cuba, Czechoslovakia, France, India, Lebanon, Luxemburg, Netherlands, New
Zealand, Norway, Pakistan, Southern Rhodesia, Syria, South Africa, United
Kingdom and United States.The first
Session of the contracting parties was held from February to March in Havana,
Cuba.The secretariat of the Interim
Commission for the ITO, which served as the ad hoc secretariat of GATT,
move from lake Placid, New York, to Geneva.The Contracting Parties held their second session in Geneva from August
to September.

1949Second
Round at Annecy.During the second
Round of trade negotiations, held from April to August at Annecy, France, the
contracting parties exchange some 5,000 tariff concession.At their third Session, they also dealt with
the accession of ten more countries.

1950Third
Round At Torquay.From September
1950 to April 1951, the contracting parties exchange some 8,700 tariff
concessions in the English town, yielding tariff reduction of about 25 per cent
in relation to the 1948 level.Four
more countries acceded to GATT.During
the fifth Session of the Contracting Parties, the United States indicated that
the ITO Charter would not be re-submitted to the US congress; this, in effect,
meant that ITO would not come into operation.

1956Fourth
Round at Geneva.The fourth Round
was completed in May and produce some $2.5 billion worth of tariff reductions.At the beginning of the year, the GATT
commercial policy course for officials of developing countries was inaugurated.

1958The
Haberler Report. GATT published Trends inInternational Trade
in October.Known as the "Haberler
Report" in honour of Professor Gottfried Haberler, the chairman of the
panel of imminent economist, it provided initial guidelines for the work of
GATT.The Contracting Parties at their
13th Sessions, attended by Ministers, subsequently established 3 committees in
GATT:Committee I to convene a further
tariff negotiating conference; Committee II To review the agricultural policies
of member governments and Committee III to tackle the problems facing
developing countries in their trade.The establishment of the European Economic Community during the previous
year also demanded large scale tariff negotiation under Article XXIV 6 of the
General Agreement.

1960The
Dillon Round. The fifth Round opened in September and was divided into two
phases: the first was concerned with EEC members states for the creation of a
single schedule of concessions for the Community based on its Common External
Tariff; and the second was a further general round of tariff negotiations.Named in honor of US Under-Secretary of
State Douglas Dillon who proposed the negotiations, the Round was concluded in
July 1962 and resulted in about 4,400 tariff concessions covering $4.9 billion
of trade.

1961The
Short-Term Arrangement covering cotton textiles was agreed as an exception
to the GATT rules.The arrangement
permitted the negotiation of quota restrictions affecting the exports of
cotton-producing countries.In 1962 the
"Short Term " Arrangement become the "Long term"
Arrangement, lasting until 1974 when the Multifibre Arrangement entered into
force.

1964 The
Kennedy Round.Meeting at
Ministerial Level, a Trade Negotiations Committee formally opened the Kennedy
Round in May.In June 1967, the Round's
Final Act was signed by some 50 participating countries which together
accounted for 75 per cent of world trade.For the first time, negotiation departed from product-by-product
approach used in the previous Rounds to an across-the-board or linear method of
cutting tariffs for industrial goods.The working hypothesis of a 50 per cent target cut in tariff levels was
achieved in many areas.Concessions
covered an estimated total value of trade of about $40 billion.Separate agreements were reached on grains,
chemical products and a Code on Anti-Dumping.

1965A
New Chapter.The early 1960s marked
the accession to the General Agreement of many newly-independent developing
countries.In February, the Contracting
Parties, meeting in a special session, adopted the text of Part IV on Trade and
Development.The additional chapter to
the GATT required developed countries to accord high priority to the reduction
of trade barriers to products of developing countries.A committee on Trade and Development was
established to oversee the functioning of the new GATT provisions.In the precedingyear, GATT had established the International Trade Center (ITC)
to help developing countries in trade promotion and identification of potential
markets.Since 1968, the ITC had been
jointly operated by GATT and the UN Conference on Trade and Development
(UNCTAD).

1973The
Tokyo Round.The seventh Round was
launched by Ministers in September at the Japanese capital.Some 99 countries participated in
negotiating a comprehensive body of agreements covering both tariff and
non-tariff matters.At the end of the
Round in November 1979, participants exchange tariff reduction and bindings
which covered more than $300 billion of trade.As a result of these cuts, the weighted average tariff on manufactured
goods in the world's nine major Industrial Markets declined from 7.0 to 4.7 per
cent.Agreements were reached in the
following areas; subsidies and countervailing measures, technical barriers to
trade, import licensing procedures, government procurement, customs valuation,
a revisedanti-dumping code, trade in
bovine meat, trade in daily products and trade in civil aircraft.The first concrete result of the Round was
the reductionof import duties and
other trade barriers by industrial countries on tropical products exported by
developing countries.

1974On1 January 1974, the Arrangement Regarding
International Trade in textiles, otherwise known as the Multifibre
Arrangement (MFA), entered into force.Its superseded the arrangement that had been governing trade in cotton
textiles since 1961.The MFA seeks to
promote the expansion and progressive liberalization of trade in textile
product while at the same time avoiding disruptive effects in individual
markets in lines of production.The MFA
was extended in 1978, 1982, 1986, 1991 and 1992.MFA members account for most of the world exports of textiles and
clothing which in 1986 amounted to US$128 billion.

1982Ministerial
Meeting.Meeting for the first time
in nearly ten years, the GATT Ministers in November at Geneva reaffirmed the
validity of GATT rules for the conduct of international trade and committed
themselves to combating protectionist pressures.They also established a wide-ranging work programme for the GATT
which was to laid down the ground work for a new Round. 1986The Uruguay Round. The GATT Trade
Ministers meeting at Punta del Este, Uruguay, launched the eighth Round of
Trade Negotiations on 20 September.The
Punta del Este, declarations, while representing a single political undertaking,
was divided into two section.The First
covered negotiations on Trade in goods and the second initiated negotiation on
trade in services.In the area of trade
in goods, the Ministers committed themselves to a "standstill" on new trade measures inconsistent with
their GATT obligations and to a "rollback" programme aimed at phasing
out existing inconsistent measures.Envisaged to last four years, negotiations startedin earlyFebruary 1987 in the following areas: tariffs, non-tariff measures,
tropical products, natural resource-based products, textiles and clothing,
agriculture, subsidies, safeguards, trade-related aspects of intellectual
property rights including trade in counterfeit goods, in trade- related investment
measures. The work of other groups included a review of GATT articles, the GATT
dispute-settlement procedure, the Tokyo Round agreements, as well as
functioning of the GATT system as a whole.

1994"GATT 1994" is the updated version of GATT 1947
and takes into account the substantive and institutional changes negotiated in
the Uruguay Round.GATT 1994 is an
integral part of the World Trade Organization established on 1 January
1995.It is agreed that there be a one
year transition period during which certain GATT 1947 bodies and commitments
would co-exist with those of the World Trade Organization."

I have the honor to forward herewith an authenticated copy of
the Uruguay Round Final Act signed by Department of Trade and Industry
Secretary Rizalino S. Navarro for the Philippines on 15 April 1994 in
Marrakesh, Morocco.

The Uruguay Round Final Act aims to liberalize and expand
world trade and strengthen the interrelationship between trade and economic
policies affecting growth and development.

The Final Act will improve Philippine access to foreign
markets, especially its major trading partners through the reduction of tariffs
on its exports particularly agricultural and industrial products.These concessions may be availed of by the
Philippines, only if it is a member of the World Trade Organization.By GATT estimates, the Philippines can
acquire additional export revenues from $2.2 to $2.7 Billion annually under
Uruguay Round.This will be on top of
the normal increase in exports that the Philippines may experience.

The Final Act will also open up new opportunities for the
services sector in such areas as the movement of personnel, (e.g. professional
services and construction services), cross-border supply (e.g. computer-related
services), consumption abroad (e.g. tourism, convention services, etc.) and
commercial presence.

The clarified and improved rules and disciplines on
anti-dumping and countervailing measures will also benefit Philippine exporters
by reducing the costs and uncertainty associated with exporting while at the
same time providing a means for domestic industries to safeguard themselves
against unfair imports.

Likewise, the provision of adequate protection for
intellectual property rights is expected to attract more investments into the
country and to make it less vulnerable to unilateral actions by its trading
partners (e.g. Sec. 301 of the United States Omnibus Trade Law).

In view of the foregoing, the Uruguay Round Final Act is
hereby submitted to the Senate for its concurrence pursuant to Section 21,
Article VII of the Constitution.

A draft of a proposed Resolution giving its concurrence to
the aforesaid Agreement is enclosed.

I have the honor to forward
herewith an authenticated copy of the Uruguay Round Final Act signed by
Department of Trade and Industry Secretary Rizalino S. Navarro for the
Philippines on 13 April 1994 in Marrakech (sic), Morocco.

Members of the trade negotiations
committee, which included the Philippines, agreed that the Agreement
Establishing the World Trade Organization, the Ministerial Declarations and
Decisions, and the Understanding on Commitments in Financial Services embody
the results of their negotiations and form an integral part of the Uruguay
Round Final Act.

By signing the Uruguay Round Final
Act, the Philippines, through Secretary Navarro, agreed:

(a)To submit the
Agreement Establishing the World Trade Organization to the Senate for its
concurrence pursuant to Section 21, Article VII of the Constitution; and

(b)To adopt the
Ministerial Declarations and Decisions.

The Uruguay Round Final Act aims to liberalize and expand
world trade and strengthen the interrelationship between trade and economic
policies affecting growth and development.

The Final Act will improve
Philippine access to foreign markets, especially its major trading partners
through the reduction of tariffs on its exports particularly agricultural and
industrial products.These concessions
may be availed of by the Philippines, only if it isa member of the World Trade Organization.By GATT estimates, the Philippines can
acquire additional export revenues from $2.2 to $2.7 Billion annually under
Uruguay Round.This will be on top of
the normal increase in the exports that the Philippines may experience.

The Final Act will also open up new
opportunities for the services sector in such areas as the movement of
personnel, (e.g., professional services and construction services),
cross-border supply (e.g., computer-related services), consumption abroad
(e.g., tourism, convention services, etc.) and commercial presence.

The clarified and improved rules
and disciplines on anti-dumping and countervailing measures will also benefit
Philippine exporters by reducing the costs and uncertainty associated with
exporting while at the same time providing a means for domestic industries to
safeguard themselves against unfair imports.

Likewise, the provision of adequate
protection for intellectual property rights is expected to attract more
investments into the country and to make it a less vulnerable to unilateral
actions by its trading partners (e.g., Sec. 301 of the United States Omnibus
Trade Law).

In view of the foregoing, the
Uruguay Round Final Act, the Agreement Establishing the World Trade
Organization, the Ministerial Declarations and Decisions, and the Understanding
on Commitments in Financial Services, as embodied in the Uruguay Round Final
Act and forming and integral part thereof are hereby submitted to the Senate
for its concurrence pursuant to Section 21, Article VII of the Constitution.

A draft of a proposed Resolution
giving its concurrence to the aforesaid Agreement is enclosed.

Pursuant to the provisions of Sec.
26 (2) Article VI of the Constitution, Ihereby certify to the necessity of the immediate adoption of P.S. 1083,
entitled:

CONCURRING IN THE RATIFICATION OF THE AGREEMENT
ESTABLISHING THE WORLD TRADE ORGANIZATION

to meet a public emergency
consisting of the need for immediate membership in the WTO in order to assure
the benefits to the Philippine economy arising from such membership.

Very truly yours,

(SGD.)FIDEL V.
RAMOS

[6]Attached as Annex A,
Petition; rollo, p. 52. P.S. 1083 is the forerunner of assailed Senate
Resolution No. 97.It was prepared by
the Committee of the Whole on the General Agreement on Tariffs and Trade
chaired by Sen. Blas F. Ople and co-chaired by Sen. Gloria Macapagal-Arroyo;
see Annex C, Compliance of petitioners dated January 28, 1997.

[9]In compliance,
Ambassador Bautista submitted to the Court on August 12, 1996, a Memorandum
(the Bautista Paper) consisting of 56 pages excluding annexes.This is the same document mentioned in
footnote no. 1.

[16]In a privilege
speech on May 17, 1993, entitled Supreme Court -- Potential Tyrant? Senator
Arturo Tolentino concedes that this new provision gives the Supreme Court a
duty to intrudeinto the jurisdiction
of the Congress or the President.

[23]Bernas, The
Constitution of the Philippines: A Commentary, Vol. II, 1988 Ed., p.
2.In the very recent case of Manila
Prince Hotel vs. GSIS, G.R. No. 122156, February 3, 1997, p. 8, it was
held that A provision which lays down a general principle, such as those found
in Art. II of the 1987 Constitution, is usually not self-executing.

[38]Justice Isagani A.
Cruz, Philippine Political Law, 1995 Ed., p. 13, quoting his own article
entitled, A Quintessential Constitution earlier published in the San Beda
Law Journal, April 1972; underscoring supplied.

[55]The full text, without the signatures, of the Final
Act is as follows:

Final
Act Embodying the Results of the

Uruguay
Round of Multilateral Trade Negotiations

1. Having met in order to conclude the
Uruguay Round of Multilateral Trade Negotiations, representatives of the
governments and of the European Communities, members of the Trade Negotiations
Committee, agree that the Agreement Establishing the World Trade
Organization (referred to in the Final Act as the WTO Agreement), the
Ministerial Declarations and Decisions, and the Understanding on Commitments in
Financial Services, as annexed hereto, embody the results of their negotiations
and form an integral part of this Final Act.

2. By signing to the present Final Act,
the representatives agree.

(a) to submit, as
appropriate, the WTO Agreement for the consideration of their respective
competent authorities with a view to seeking approval of the Agreement in
accordance with their procedures; and

(b) to adopt the Ministerial
Declarations and Decisions.

3. The representatives agree on
the desirability of acceptance of the WTO Agreement by all participants in the
Uruguay Round of Multilateral Trade Negotiations (hereinafter referred to as
participants) with a view to its entry into force by 1 January 1995, or as
early as possible thereafter.Not later
than late 1994, Ministers will meet, in accordance with the final paragraph of
the Punta del Este Ministerial Declarations, to decide on the international
implementation of the results, including the timing of theirentry into force.

4.The representatives agree that the WTO Agreement shall be opened for
acceptance as a whole, by signature or otherwise, by all participants pursuant
to Article XIV thereof.The acceptance
and entry into force of a Plurilateral Trade Agreement included in Annex 4 of
the WTO Agreement shall be governed by the provisions of that Plurilateral
Trade Agreement.

5.Before accepting the WTO Agreement, participants which are not
contracting parties to the General Agreement on Tariffs and Trade must first have
concluded negotiations for their accession to the General Agreement and become
contracting parties thereto.For
participants which are not contracting parties to the general Agreement as of
the date of the Final Act, the Schedules are not definitive and shall be
subsequently completed for the purpose of their accession to the General
Agreement and acceptance of the WTO Agreement.

6.This Final Act and the Texts annexed hereto shall be deposited with the
Director-General to the CONTRACTING PARTIES to the General Agreement on Tariffs
and Trade who shall promptly furnish to each participant a certified copy
thereof.

DONE at Marrakesh this fifteenth day of April One thousand
nine hundred and ninety-four, in a single copy, in the English, French and
Spanish languages, each text being authentic."